Document background
A Lease Contract Guaranty is a crucial security instrument in the Indian real estate market, commonly used when landlords require additional assurance of lease obligation fulfillment. This document becomes particularly relevant in commercial leasing scenarios where the tenant is a newly established company, has limited credit history, or where the lease value is substantial. The guarantee, governed by Indian law, particularly the Indian Contract Act, 1872, creates a legally binding commitment from a third party (often a parent company, director, or financially stable entity) to assume responsibility for the tenant's obligations if they default. The document specifies the extent of the guarantee, conditions for enforcement, and duration of the obligation, providing landlords with a secondary source of recourse while facilitating lease arrangements that might otherwise be considered too risky.
